2017 Tesla Model 3, in photo tweeted by Elon Musk on July 9, 2017
Six of Tesla’s board members issued a statement Wednesday morning confirming that they have been in discussions with CEO Elon Musk about taking the company private.
On Tuesday, Musk revealed on Twitter that he was considering privatizing the company after taking it public in 2010.
He set a target stock price of $420 a share and said he had investors lined up to purchase the company at that price.
Shareholders could either to sell at 420 or hold shares & go private
— Elon Musk (@elonmusk) August 7, 2018
Any final decision about privatizing the company would fall to existing shareholders.
Musk later tweeted that existing stockholders could choose whether to hold onto their shares or sell them to the new investors for $420 a share.
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The key question following Musk’s Tuesday tweet-storm was whether current investors, as represented by the board of directors, were interested in such a proposal. If not, it could amount to idle chatter, perhaps aimed at boosting the company’s stock price.
The statement by the board, published by NASDAQ, confirms that the proposal is under serious consideration.
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In a later statement to employees and posted on Tesla’s blog, Musk explained: “Being public … subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term…. I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.”
There has been no word on when any vote might take place.